The recent decision of the Supreme Court of Western Australia in Mighty River International Ltd v Hughes & Bredenkamp [2017] WASC 69 (Mighty River v Hughes) has confirmed the legality and the utility of ‘holding’ deeds of company arrangement (colloquially referred to as ‘Holding DOCAs’).
Hold what?
Boart Longyear – the recent appeal decision
The limitations of set-off in a liquidation scenario and the nature and effect of a security interest under the Personal Property Securities Act 2009 (Cth) (PPSA) have been clarified, with significant ramifications for principals and financiers, who should now review their rights, following the WA Supreme Court's decision in Hamersley Iron Pty Ltd v Forge Group Power Pty Ltd (In Liquidation) (Receivers and Managers Appointed) [2017] WASC 152 (Clayton Utz acted for the successful receivers).
This week’s TGIF considers Bunnings Group Ltd v Hanson Construction Materials Pty Ltd & Anor [2017] WASC 132, where the Court considered whether the order of registration of caveats determined the priority of competing unregistered charges.
BACKGROUND
Bunnings and Hanson each supplied building materials to Capital Works prior to Capital Works’ liquidation by means of a creditors’ voluntary winding up.
Creation of the charges
In one of the most significant decisions relating to schemes of arrangement in Australia in recent years, the New South Wales Court of Appeal has dismissed an appeal challenging the composition of classes of creditors in the Boart Longyear restructuring.
On 1 June 2017 a new law came into effect in New South Wales relevant to liquidators’ rights to directly pursue the insurer of a proposed defendant, taking away significant uncertainty which existed previously because of antiquated provisions in a 1946 act relating to charges over and priorities to those insurance monies.
The new law now provides greater certainty for liquidators in deciding whether to bring proceedings directly against the insurers of directors and officers or indeed of other third parties against whom the liquidators may have claims.
Update on Liquidator remuneration post-Sakr1
Key points summary
Following the recent high-profile appeal decision2, the Supreme Court of New South Wales has now finalised the saga that was the review and approval of the remuneration of the Liquidator of Sakr Nominees.
From that decision emerge several key points for insolvency professionals when considering their remuneration:
Justice Robson has delivered his decision on an application by receivers and managers for directions as to, among other things, their obligations to pay preferential debts under the Corporations Act from the surplus generated by their trading-onof a business and other recoveries by their appointing bank.
Following consultation on exposure draft legislation between 28 March 2017 and 24 April 2017, the Treasury Laws Amendment (2017 Enterprise Incentives No.2) Bill 2017 (Cth) (Bill) was introduced into the House of Representatives and received its second reading speech on 1 June 2017.
The Bill proposes to:
Bicheno Investments Pty Ltd v David John Winterbottom [2017] NSWSC 536 has confirmed that the completion of a stocktake does not necessarily require a full physical stocktake. Rather insolvency practitioners may satisfactorily complete a stocktake by reviewing a business’ records, provided they are satisfied that those records are accurate and complete.